Bangladesh : Edible oil prices rise again as millers cut supply
Bangladesh’s edible oil market faces disruption as refiners cut bottled soybean oil supply after the government fixed the price at Tk 190 per litre. Retailers sell oil at Tk 200, while loose soybean and palm oil rose Tk 10–15. Traders demand higher rates amid rising global prices; imports remain crucial, as 90% of the 2.2–2.5 million-tonne annual demand is imported.
The edible oil market has become unstable again as most refiners reduced their supply of bottled soybean oil to grocery stores after the government proposed the price at Tk 190 per litre.
Many distributors reportedly sold stored oil at higher prices, while several grocery shops were found selling oil at Tk 200 per litre – Tk 10 more than the official rate, according to sources in the city’s kitchen markets.
Prices of loose soybean and palm oil have also increased by Tk 10-15 per litre, depending on the area. Loose soybean oil is now selling for Tk 182-185 per litre and palm oil for Tk 170-180 per litre.
A dispute has emerged between the government and oil traders after the Ministry of Commerce allowed only a Tk 1.0 increase per litre, rejecting refiners’ demand for a Tk 10 hike following a rising global price.
The decision was made at a closed-door meeting on September 22, chaired by Commerce Adviser Sk Bashir Uddin, with representatives from City Group, Meghna Group, TK Group, and Bangladesh Edible Oil Ltd. The meeting ended without an agreement.
Afterwards, refiners began reducing supply, said Monwar Hossain, a distributor from Kaptan Bazar. “I ordered oil from two refiners two weeks ago but haven’t received any one-litre or two-litre bottles,” he said.
Rezaul Islam Mridha, a grocer from Rayer Bazar, said distributors are now charging Tk 3.0-5.0 extra for each bottle. “I ordered four cartons –18 bottles each –but haven’t received any, and my old stock is finished,” he said.
Most groceries visited by the FE reported similar problems.
A major importer and miller, who requested anonymity, said that most millers have stopped importing oil to avoid losses. “The commerce ministry is being stubborn instead of taking an economic view,” he said.
“Global edible oil prices have risen by 18-20 per cent, and imports need to increase now to ensure adequate supply before Ramadan, which begins in late February.” He also said the Bangladesh Trade and Tariff Commission (BTTC) has again proposed setting the bottled soybean oil price at Tk 199 per litre.
Consumers Association of Bangladesh (CAB) Vice-President SM Nazer Hossain said the government must act strictly to ensure smooth supply. “Refiners are using blackmail tactics, showing clear oligopoly in the market,” he said.
He said that prices should be adjusted logically based on import costs, but millers must continue supplying oil until new rates are approved. Hossain
accused refiners of exploiting their dominance since only six or seven companies control the market. “Imports should be liberalised so that 400-500 companies can bring in edible oil,” he said.
Bangladesh needs about 2.2-2.5 million tonnes of edible oil every year, more than 90 per cent of which comes from imports.
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Source : The Financial Express
